The Gulag system, a grim hallmark of Stalin’s Soviet Union, was designed to repress and uproot millions, particularly intellectuals deemed “Enemies of the People.” Yet, in a strange twist of fate, regions near these labor camps now exhibit greater economic prosperity, which speaks volumes about the enduring power of education and human capital.

From the very early days of the Soviet Union, intellectuals were enemies. They were seen as political opponents and a potential threat to the regime. They were designated “Enemies of the People”, rounded up, and either killed or sent to various locations across the GULAG, a system of labor camps spread across the Soviet Union.

These camps, a grim symbol of Stalin’s reign, were brutal. They subjected the captives to inhuman conditions, often torturing and killing them. Historians estimate the total number of Gulag prisoners at 20 million, of whom about 2 million did not survive their incarceration. But after they closed down, in addition to the tragic legacy, they also left behind some hotspots of innovation.

Intellectuals not wanted

At the height of Stalin’s Great Terror (1936–1938), more than 1.5 million people were arrested, with half executed and the remainder sent to camps. By 1939, the Gulag had a disproportionately educated population: 1.8% of its prisoners had tertiary education compared to just 0.6% of the general Soviet population. This concentration of intellectual capital within the camps inadvertently planted the seeds of future regional prosperity.

Stalin’s death in 1953 marked the rapid closure of these camps, but many former prisoners remained near their places of confinement. They had few economic options and faced several restrictive mobility laws that tethered them to the areas surrounding the camps.

Many developed a psychological attachment to the camps, a type of Stockholm Syndrome, as Russian novelist, historian, and dissident Aleksandr Solzhenitsyn eloquently put it: “Exile relieved us of the need to choose a place of residence for ourselves, and so from troublesome uncertainties and errors. No place would have been right, except that to which they had sent us”. Solzhenitsyn would go on to win a Nobel Prize for his literary work on the Gulag.

So after years or decades of inhuman containment, these people often found themselves living in close proximity to where they were detained, joining the local community. But here’s the thing: even after detainment, they were still educated people with professional expertise. They were a reservoir of human capital that would lead to more successful outcomes and economic development, especially after the fall of the USSR when Russia opened up to capitalism.

Education is an engine of growth

The study, conducted by Gerhard Toews and Pierre-Louis Vézina, provides compelling evidence that the GULAG’s educated prisoners influenced the long-term prosperity of nearby regions. Their analysis links the distribution of GULAG camps in 1952 to modern metrics such as night-light intensity, wages, and firm productivity between 2000 and 2018.

Areas near camps with higher proportions of “Enemies of the People” exhibit significantly greater economic activity. For instance, a 28% increase in the share of political prisoners correlates with a 58% rise in night-light intensity per capita, a 65% boost in profits per employee, and a 22% increase in average wages. These metrics highlight a lasting legacy of education-driven economic success.

“We suggest that the relationship between enemies and modern prosperity is due to the long-run persistence of high education levels, notably via intergenerational transmission, and their role in increasing firm productivity,” the two researchers note.

Surveys reveal that even in modern times, grandchildren of political prisoners are more educated than their peers. Moreover, they are more likely to reside near the camps where their grandparents were held, suggesting a geographical continuity of intellectual influence.

A paradoxical outcome

This pattern underscores the resilience of human capital, even under dire circumstances. Despite the brutality of forced relocations, the skills and knowledge of the Gulag prisoners were passed down, creating a legacy that benefited subsequent generations.

Toews and Vézina’s research also rules out alternative explanations for these findings. They investigated whether, perhaps, the Soviets realized the value of this human capital and strategically invested in regions with higher numbers of educated prisoners. This was not the case; if anything, areas with larger populations of political prisoners often received less state investment in infrastructure, railroads, and industrial facilities during the post-Gulag era.

This paradox underscores the transformative power of education, even in the harshest conditions. A person may be imprisoned and have everything they own taken from them — but no one can take away their knowledge. It also poses a haunting question: how might the Soviet Union (and the rest of the world) have looked like if it had not sought to repress and destroy its intellectuals?

The story of the Gulag is a painful reminder that oppression not only devastates its victims but stifles potential that could benefit society as a whole. It also serves as a timeless lesson on the value of nurturing education and human capital in free and supportive environments.